Message Font: Serif | Sans-Serif
No. of Recommendations: 0
<< I had a stock do a reverse split leaving me with 166 out of 2500 shares. Does this count as a
capital loss since those shares have been lost and I have lost money? DO i need to sell the 166
shares of the split stock before I can claim the capital loss.? >>

Nope. No tax event on the reverse split, other than you now spread your total tax basis over fewer number of shares.

But you receive no taxable loss, capital or otherwise, on the reverse split. If the securities have NO value, and can't be sold to anybody at any price, you may have worthless secutities...which is a different animal. Read more about worthless securities in the Taxes Frequently Asked Questions area (go to the Fools School and follow the roadmap).

In order to secure a loss on the shares, they must be sold. Not necessarily all of them, but certainly some of the shares must be sold in order to generate any type of tax loss. A simple decline in value of the shares is not a taxable event, and will not yeild you a tax loss.

TMF Taxes
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.